9.	Income Taxes

The effective income tax rate was (12.7)% and (9.4)% for the three and nine months ended November 2, 2013. This effective income tax rate differed from the statutory federal income tax rate of 35% primarily from increases in the valuation allowance recorded for additional deferred tax assets generated primarily from operating losses in the three and nine months ended November 2, 2013 by the Company’s U.S. operations.

The effective income tax rate was (47.1)% and (19.1)% for the three and nine months ended October 27, 2012. This effective income tax rate differed from the statutory federal income tax rate of 35% primarily from increases in the valuation allowance recorded for additional deferred tax assets generated primarily from operating losses in the three and nine months ended October 27, 2012 by the Company’s U.S. operations.

In April 2011, the Company received from the Canada Revenue Agency withholding tax assessments for 2003 through 2007 of approximately $5.7 million, including penalties and interest. In conjunction with these assessments, a security deposit will be required in the amount of approximately $5.7 million until such time a final decision is made by the tax authority. The Company is objecting to these assessments and believes it will prevail at the appeals level; therefore, an accrual has not been recorded for this item.